P/E (price earnings ratio) is a measure often used and cited for stock analysis. Commentators will often appeal to the masses by quoting lines of: “Buy this stock now! It is selling at such a low P/E ratio”
But is it a reliable measure? Let’s use the complete past 3 year financial results (excluding one-offs) of Ezion Holdings and Penguin and the share price these companies were selling for slightly after the announcement of their full year financial results on the SGX.
|FY end||Ezion EPS||Share price (start Mar)||P/E ratio|
|FY end||Penguin EPS||Share price (start Mar)||P/E ratio|